CMAQ rule simplification may free up millions in funding for clean fuels and vehicles

A simple rule change, allowing CMAQ-FHWA Buy America AFV projects to adopt the FTA Buy America rules for clean vehicle projects would move hundreds of currently stuck CMAQ AFV projects forward.

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The Congestion Mitigation and Air Quality (CMAQ) program provides millions of dollars of funding across the country for clean vehicle projects. CMAQ was created in 1992 following passage of the federal Clean Air Act (CAA). The program is designed to reduce air pollution from transportation sources, primarily by reducing traffic congestion and single passenger car travel in urban areas. However, alternative fuel vehicles (AFVs) always have been explicitly eligible for funding, but unfortunately, Federal Highway Administration (FHWA) policy under the Trump Administration has eliminated funding for AFVs. On a positive note, a simplification of bureaucratic rules could change this and get CMAQ funding moving once again.

The Congestion Mitigation and Air Quality (CMAQ) program provides millions of dollars of funding across the country for clean vehicle projects.

CMAQ History

First, here is a little history and context. FHWA is one of several transportation agencies within the U.S. Department of Transportation (USDOT). CMAQ is one among a cluster of FHWA funding pots, each of which is allocated to state departments of transportation. To use Ohio as an example, FHWA provides a slice of CMAQ funding, based on an allocation formula, to Ohio Department of Transportation (ODOT). From there, ODOT directs a portion of these funds on state-level projects, then sub-allocates the remainder to individual metropolitan planning organizations (MPOs). All ODOT and MPO-directed CMAQ funding must be approved by the FHWA, and one criterion is compliance with Buy America rules created out of a 1982 law, and updated subsequently.

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FHWA, thus CMAQ, Buy America rules require 100% domestically manufactured steel content in all FHWA-funded projects. The rule is designed for the types of projects FHWA typically supports, e.g. highway and bridge construction. FHWA administrators, dating back to the Clinton Administration in the 1990’s, have routinely granted waivers for AFV projects funded by CMAQ. This is because vehicle manufacturing is fundamentally different than highway and bridge construction. The complex, global supply chain for vehicles makes compliance with a 100% domestic steel content impossible to meet. Since early 2017, a few projects were grandfathered and granted waivers, however, as a policy matter, Trump’s FHWA has refused to grant them.

AFV projects are consistent with the CMAQ mission because they reduce emissions, but they are an odd fit within the FHWA, whose primary mission is funding roads and bridges.

AFV Projects Reduce Emissions

AFV projects are consistent with the CMAQ mission because they reduce emissions, but they are an odd fit within the FHWA, whose primary mission is funding roads and bridges. AFVs, like other vehicles, cannot and never will comply with a 100% domestic content standard. Location of final vehicle assembly is easy to verify, but that final assembly relies on hundreds of separate component parts sourced from many suppliers. In turn, these hundreds of components have their own supply chains. It is not possible to ensure that every nut, bolt, washer, bracket, body part, and other pieces of steel comes from a domestic manufacturer.

The feds refusal to grant waivers is heavy-handed and overly bureaucratic. It runs counter to clean air and transportation laws from the early 1990s and denies communities and the public the health benefits of cleaner vehicles, such as school buses, trucks, and newer equipment that retires old dirty diesels. Rather than protecting American jobs, it costs truck and bus parts, manufacturing and assembly jobs, since no CMAQ-funded clean vehicle projects have any hope of complying with the standard.

FHWA, thus CMAQ, Buy America rules require 100% domestically manufactured steel content in all FHWA-funded projects, typically roads and bridges. Historically, waivers have been granted for AFV projects funded by CMAQ, but Trump’s FHWA has refused to grant them.

FHWA Buy America Rules Differ from FTA

Interestingly, other agencies within USDOT have different Buy America rules. Some are based on updates to transportation law and others are based on rules changes. Specifically, Federal Transit Administration (FTA) Buy America rules differ significantly from FHWA. This is because a significant portion of FTA’s mission is funding transit vehicles, so the rules are based on characteristics of vehicle manufacturing, not highway and bridge construction. FTA Buy America rules require 100% domestic assembly and a lower percentage of domestic content, currently 60% but set to ratchet up. Transit bus manufacturers are required to document compliance with these FTA rules. By and large, projects do not require a waiver.

Simple Rule Change Would Open CMAQ Funds

The best solution to this CMAQ-FHWA Buy America impasse is a straightforward change that would apply only to the very small percentage of FHWA projects, within CMAQ, that fund clean vehicle replacements. For this small subset of projects, FHWA would simply substitute and apply FTA Buy America rules, designed in the first place with vehicles in mind. This may require Congress to make a simple change in statute, or USDOT to change the rules. We are looking at this now with allies. Either way, the modification is simple and makes common sense.

A simple rule change, allowing CMAQ-FHWA Buy America AFV projects to adopt the FTA Buy America rules for clean vehicle projects would move hundreds of currently stuck CMAQ AFV projects forward.

Besides being a win for clean air, it would be a win for American jobs. Currently, hundreds of CMAQ clean vehicle projects are stuck due to this bureaucratic morass. Not only could these clean vehicle projects start moving again, the change would eliminate the need or justification for waivers. Effectively the waivers under previous administrations reduced the Buy America content and assembly requirement to zero, allowing 100% imported vehicles to be purchased with federal transportation funding. By using the FTA Buy American standard, vehicles would need to be 100% assembled in the US with at least 60% (and increasing) domestic content. The standard would be tough, but attainable, which would drive the clean vehicle industry toward more domestic assembly and parts content.

Clean Fuels Ohio is working with a variety of allies to move this issue forward – including determining whether changes require statutory or just a rule-making change. We welcome the support and participation of interested parties from across the country who care about clean vehicles, clean air and American jobs.

This article was originally published in ACT News on January 24, 2019, and is republished here with permission from the author.

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